Investment Musings

I know a number of knowledgeable people and I can pick their brains. If I write anything here that comes from one specific source, I'll name that source. However, most of it comes from synthesizing the input from several very smart people.

Tuesday, September 30, 2008

Residential mortgages and, especially, home equity lines of credit are getting harder and harder to qualify for. The fees are also much higher now than they were a couple of years ago.

This has made real estate investing harder for many people.

One source of credit that hasn't been hit as hard is business credit. It has taken some hits but those changes are more because the lenders are getting smarter than getting more cautious. You can no longer buy a two year old corporation that only exists on paper and start qualifying for $1,000,000 plus loans. I don't think that's necessarily a bad thing.

With a new business (just started or a shelf corp), you can get between $150,000 and $300,000 in business lines of credit. That's enough to invest in real estate in most of the USA.

Now, if you do have a company that's been active for eighteen months or more, you can reach the $1,000,000 mark.